Gold rose as high as $812.20 an ounce, its highest level since Nov. 28.

The Fed is expected to cut U.S. interest rates by at least 25 basis points. Due in part to stronger than expected employment data released Friday, a 50 basis point cut now seems unlikely.

"The dollar is a major factor,” MKS Finance analyst Frederic Panizzutti told Reuters. “The expectation on tomorrow's rate decision is resulting in some positioning in the dollar and in gold, which is affecting both the markets differently — the dollar in a negative way and gold in a positive way."

A rate cut is expected to weaken the dollar further and make gold more attractive as an alternative investment. The dollar lost against most major currencies on Monday, reversing the small gains of late last week.

“I believe that even at $800 an ounce, gold is still a value play, especially when compared to a weakening U.S. dollar,” Emanuel Balarie said in an email. Balarie is Chief Executive Officer of Jabez Capital Management, a firm specializing in commodities and alternative investments.

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